Loss Prevention Presentation

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Loss Prevention Information

Loss Prevention Presentation

  1. 1. TODAY’S LOSS PREVENTION Joshua McAfee C.F.E., C.F.I.
  2. 2. HISTORICAL OVERVIEW <ul><li>First codification of law – 1800 BC – Hammurabi’s Code </li></ul><ul><li>Modern Police Roots – Sir Robert Peel – in 1829 – COP, Crime Prevention first started </li></ul><ul><li>1980, Association of Chief of Police, made crime prevention as a standard police function. </li></ul><ul><li>CPO – Crime Prevention Officer – a public servant with police powers. </li></ul><ul><li>LPO – Loss Prevention Officer – private sector deriving authority from an employer. </li></ul>
  3. 3. LP FOUNDATION TOOLS <ul><li>Five tools that form the foundation of a Loss Prevention program. </li></ul>
  4. 4. 1 ST LP TOOL <ul><li>RISK ANALYSIS – Estimating expected loss from a specific threat – has 3 steps: </li></ul><ul><li>1. Loss Prevention Survey </li></ul><ul><li>2. Identifying vulnerabilities </li></ul><ul><li>3. Determining probability / frequency / costs </li></ul><ul><li>Process leads to the Loss Prevent Profile. </li></ul>
  5. 5. LOSS EVENT PROFILE <ul><li>LOSS EVENT PROFILE: </li></ul><ul><li>1. Type of Risk </li></ul><ul><li>2. Probability of Event </li></ul><ul><li>3. Criticality of Event </li></ul>
  6. 6. 2 ND LP TOOL <ul><li>PLANNING – Results in a design for reaching objectives – must fulfill organizational goals – Respond to: </li></ul><ul><li>1. What is cost? </li></ul><ul><li>2. Is it practical? </li></ul><ul><li>3. Is it cost effective? </li></ul><ul><li>4. Will Management support strategy. </li></ul>
  7. 7. 3 RD LP TOOL <ul><li>EVAULATION – A critical tool once program is implemented. Ways to do this: </li></ul><ul><li>1. Pre test / Post test design </li></ul><ul><li>2. Experimental / Control Group Design </li></ul>
  8. 8. 4TH LP TOOL <ul><li>RESEARCH – Four basic steps: </li></ul><ul><li>1. Statement of the problem </li></ul><ul><li>2. Hypothesis </li></ul><ul><li>3. Testing </li></ul><ul><li>4. Conclusion </li></ul>
  9. 9. 5 TH LP TOOL <ul><li>STANDARDS – Promotes uniformity; E.G., UL, NFPA, OSHA </li></ul>
  10. 10. CRIME ANALYSIS AND LP <ul><li>Crime analysis, a systematic approach to studying crime problems, collects, categorizes and disseminates accurate, timely and useful information to line personnel. </li></ul><ul><li>Four specific steps of crime analysis: </li></ul><ul><li>1. Data collection </li></ul><ul><li>2. Analysis </li></ul><ul><li>3. Dissemination </li></ul><ul><li>4. Feedback </li></ul>
  11. 11. LP MANAGER <ul><li>Lets say something about the LP Manager’s role. </li></ul>
  12. 12. ROLE OF LP MANAGER <ul><li>Reflects needs/objectives of upper management and needs to : </li></ul><ul><li>1. Establish Priorities </li></ul><ul><li>2. Develop Written Polices </li></ul><ul><li>3. Form integrated management teams </li></ul>
  13. 13. KEY QUESTIONS <ul><li>Does LP Manager have: </li></ul><ul><li>1. Upper Management Support </li></ul><ul><li>2. Adequate Budget </li></ul><ul><li>3. Appropriate Level of Authority </li></ul>
  14. 14. CRIME PREVENTION
  15. 15. FOUR D’S OF CRIME PREVENTION <ul><li>DETER - criminal attacks </li></ul><ul><li>DETECT – attacks that occur </li></ul><ul><li>DELAY – attack to allow time for response </li></ul><ul><li>DENY – access to selected targets </li></ul>
  16. 16. ENVIRONMENTAL DESIGN <ul><li>Environmental design, or physical planning, is an approach to crime prevention in residential and commercial areas by coordinating efforts of architects, loss prevention practitioners, and police. </li></ul>
  17. 17. CPTED <ul><li>Crime prevention through environmental design (CPTED) advocates that the proper design and effective use of the building environment leads to a reduction in crime and the fear of crime. </li></ul>
  18. 18. CPTED 3 BASIC STRATEGIES <ul><li>Natural access control </li></ul><ul><li>Natural surveillance </li></ul><ul><li>Barriers (Territoriality) </li></ul>
  19. 19. “ DEFENSIBLE SPACE” <ul><li>Written by Oscar Newman </li></ul><ul><li>Strategies from a New York housing project. </li></ul><ul><li>Essence of the concept is that better residential security can be brought about through environmental and architectural design coordinated with crime prevention methods. </li></ul>
  20. 20. ENVIRONMENTAL SECURITY (E/S) <ul><li>Is an urban planning and design process which integrates crime prevention with neighborhood design and urban development. </li></ul><ul><li>The basic premise of (E/S) – design and redesign of urban environments so that crime opportunities are reduced. It has no effect on white collar crime. </li></ul>
  21. 21. REDUCTION OF CRIME THROUGH (E/S) <ul><li>Increased perpetration time – more difficult to commit crime </li></ul><ul><li>Increased detection time – enhanced by lighting, landscaping, etc. </li></ul><ul><li>Decreased reporting time – more observation by many people </li></ul><ul><li>Decreased police response time </li></ul>
  22. 22. Defensible Space Concept <ul><li>Territoriality – attitude of maintaining perceived boundaries. Outsider quietly recognized, observed. </li></ul><ul><li>Natural Surveillance – ability of inhabitants to casually an continually observe public areas. </li></ul><ul><li>Image and Milieu – involve the ability of design to counteract the perception that the area is isolated and vulnerable to crime </li></ul><ul><li>Safe Area – high degree of observation by police </li></ul>
  23. 23. RISK MANAGEMENT <ul><li>Next will will discuss the subject of risk. </li></ul>
  24. 24. CATEGORIES OF RISK <ul><li>Personal </li></ul><ul><li>Property </li></ul><ul><li>Liability </li></ul>
  25. 25. RISK ANALYSIS <ul><li>First tool is assessing risk. </li></ul><ul><li>PML – assesses vulnerability and responses to risk </li></ul><ul><li>1. Possible maximum loss – if target is totally destroyed or lost. </li></ul><ul><li>2. Probable maximum loss – is amount of loss a target is mostly likely to sustain </li></ul>
  26. 26. ALE <ul><li>Annualized Loss Expectancy (ALE) – this formula is used specifically when doing a quantitative risk analysis – such as terminating if another generator should be added to the plan used when computing a return on investment (ROI) </li></ul>
  27. 27. Crime Risk Management <ul><li>Risk Avoidance </li></ul><ul><li>Risk Transfer ( Buying Insurance) </li></ul><ul><li>Risk Abatement (Reduction) </li></ul><ul><li>Risk Spreading </li></ul><ul><li>Risk Acceptance (Wish for the best) </li></ul>
  28. 28. INSURANCE RATES <ul><li>Insurance rates are dependent on two variables: </li></ul><ul><li>1. Frequency of claims </li></ul><ul><li>2. Cost of each claim </li></ul>
  29. 29. BONDS <ul><li>BOND – Legal instrument where one party agrees to indemnify another party if oblige incurs a loss from the person bonded. </li></ul><ul><li>Type of Bonds: </li></ul><ul><li>1. Fidelity Bond – if bonded employee after investigation to limit risk, violates the trust, the insurance indemnifies the employer. </li></ul><ul><li>2. Surety Bond – Failure to perform as agreed (Contract Bond) </li></ul>
  30. 30. INTERNAL THREATS <ul><li>Next we will discuss internal threats and losses. </li></ul>
  31. 31. PREVENTION FROM INTERNAL THREATS <ul><li>Internal theft is the greatest on going threat to business. </li></ul><ul><li>It is difficult to obtain accurate statistics as to shrinkage attributable to employee theft. </li></ul><ul><li>Internal losses occur by several methods: </li></ul><ul><li>1. Pilferage – stealing in small quantities over a long period. </li></ul><ul><li>2. Embezzlement – taking money/property entrusted to their care. </li></ul><ul><li>3. Shrinkage – loss of inventory through any means. </li></ul>
  32. 32. WHY EMPLOYEES STEAL <ul><li>Personal Problems </li></ul><ul><li>Environmental Influences </li></ul><ul><li>Rationalization </li></ul>
  33. 33. THEFT TRIANGLE <ul><li>Motivation ( Desire or Need) </li></ul><ul><li>Rationalization </li></ul><ul><li>Opportunity </li></ul>
  34. 34. DANGER SIGNS <ul><li>Counter productive behavior </li></ul><ul><li>Conspicuous Consumer </li></ul><ul><li>Financial Irresponsibility </li></ul><ul><li>Financially squeezed employee </li></ul>
  35. 35. Management Countermeasures <ul><li>Internal Controls / Separation of responsibility </li></ul><ul><li>Auditing (Inspect what you expect) </li></ul><ul><li>Management Support </li></ul><ul><li>Policy and Procedural Controls </li></ul><ul><li>Hotline </li></ul><ul><li>Thorough Investigation </li></ul><ul><li>Confrontation with employee suspect </li></ul><ul><li>Prosecution </li></ul>
  36. 36. PHYSICAL COUNTERMEASURES <ul><li>Access control </li></ul><ul><li>ID systems </li></ul><ul><li>Lock / Key Controls </li></ul><ul><li>Alarms </li></ul><ul><li>CCTV </li></ul><ul><li>Safes / Vaults </li></ul>
  37. 37. SAFETY <ul><li>Lets review some LP safety issues. </li></ul>
  38. 38. SAFETY AND LP <ul><li>Unsafe acts cause 85% of all accidents, unsafe conditions cause the remaining 15%. </li></ul><ul><li>Incident – is anything from serious injury to a breakdown in quality control </li></ul><ul><li>Accident – is an undesired event resulting in physical harm to a person or damage to property. </li></ul>
  39. 39. ACCEPTABLE WAYS TO REMEDY ACCIDENTS <ul><li>Constant inspections </li></ul><ul><li>Job safety analysis </li></ul><ul><li>Early discovery of unsafe conditions </li></ul><ul><li>Identification of hazards </li></ul><ul><li>Investigation of all accidents and near misses as soon as possible </li></ul>
  40. 40. HAZMAT <ul><li>Hazardous Material Program: </li></ul><ul><li>1. Identify hazards that are present </li></ul><ul><li>2. Know how to respond to an incident </li></ul><ul><li>3. Set up necessary safeguards </li></ul><ul><li>4. Employee training </li></ul><ul><li>5. MSDS (Right to Know Program) in place </li></ul>
  41. 41. PLANNING AND BUDGETS
  42. 42. PLANNING <ul><li>Planning – designed to fulfill organizational goals / objectives. Can be: </li></ul><ul><li>Simple </li></ul><ul><li>Complex </li></ul><ul><li>Short term </li></ul><ul><li>Long term </li></ul>
  43. 43. Budgets <ul><li>Top/down </li></ul><ul><li>Bottom/ up </li></ul><ul><li>What is a budget – a plan stated in financial terms. </li></ul><ul><li>Types of budgets: </li></ul><ul><li>Line item – each item expressed by line </li></ul><ul><li>Program – expenses are appropriated for specific activities / program or project. </li></ul><ul><li>Capital Budget – infrequently purchased / high dollar items </li></ul>
  44. 44. A BUDGET REQUIRES ….. <ul><li>A manager to operate the plan in three dimensions: </li></ul><ul><li>1. The operation /project must unfold as planned. </li></ul><ul><li>2. The operation / project must take place when planned. </li></ul><ul><li>3. It will not exceed the planned costs. </li></ul>
  45. 45. BUDGET COSTS <ul><li>Budget costs are classified under one three categories: </li></ul><ul><li>1. Salary expenses </li></ul><ul><li>2. Sundry expenses – all non – salary expenses </li></ul><ul><li>3. Capital Expenses – which are physical improvements, physical additions or major expenditures for hardware, generally considered one time expenses. </li></ul>
  46. 46. Thank You <ul><li>I hope you found this LP review helpful. </li></ul><ul><li>I wish you all the best when you are taking your exam. </li></ul>

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